Feb 20, 2006Last week, Hans-Joachim Körber, Metro's chairman and CEO, sent a warning to the radio frequency identification industry: Without a single global numbering system in place, the technology's uptake will be severely limited. "That's why we push so much, on the EPCglobal board," he said, "for one standard that fits pharma, textiles or whatever. It is a single opportunity, and we should not miss it." (See Metro Calls for Action on RFID Standards.)
Körber is absolutely right. One standard is needed, and the movement toward a new technology to collect data—RFID—offers a unique opportunity to move toward a system that will make the global economy more efficient. I have believed this for years, and I support the EPCglobal vision for one Electronic Product Code numbering scheme because it makes sense. Not everyone agrees, of course.
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The reason a single numbering scheme makes so much sense is that it enables companies to sell in a variety of industries without needing a different numbering system and a distinct way of tracking goods internally for each industry. During his presentation at RFID Journal LIVE! last year, Pat King—global electronics strategist at Michelin—showed a photo of a tire with six or seven different bar codes on it. He said his big fear was that Michelin would have to put one RFID tag in or on a tire for Wal-Mart, one for the U.S. Department of Defense, one for aircraft makers and so on.
If, on the other hand, Michelin could use one RFID tag for any customer, it would spend less on tags and inventory would be easier to track. There might be some industries so isolated that companies within it don't sell to companies outside it, but it's hard to think of any. Pharmaceutical companies, for instance, sell a lot of drugs through Wal-Mart pharmacies, and they also sell to the DOD. One standard would benefit them, as well.
Not everyone is in love with the idea, however. Some people just don't like change, while others are reluctant to alter their legacy systems. Each industry and country has its own numbering scheme. In the United States, pharmaceutical drugs have a National Drug Code. Tires have a Department of Transportation Number. The U.S. military has the Unique Identification number. There are Dun's numbers, CAGES, SGTINS and so on. And other countries have their own national coding systems.
Numbering schemes required by governments are not going away, and neither are the schemes developed by industries—at least, not for a long time. Companies have invested a lot of money in IT systems that track products by these different numbering schemes. Asking them to rip out their current systems in favor of new software that handles only EPCs is not an option. It would be too expensive and time-consuming.
EPCglobal is taking a pragmatic approach by proposing a single numbering scheme and a bridge to existing schemes. Gen 1 EPC tags were designed to be very simple and low-cost. Gen 2 EPC tags have more functionality and memory and, hence, can provide that bridge. At a meeting of the Auto Industry Action Group (AIAG), a nonprofit group that develops supply chain standards for the auto industry, experts from EPCglobal, the International Organization for Standardization (ISO) and the auto industry worked out a solution that will enable the auto industry to use EPC tags with DOT numbers.
I'm simplifying the solution a bit, of course, but essentially, there's one bit in a string of bits in the EPC itself that indicates whether the tag should be read as an EPC tag or as a tag carrying a DOT number. So if Michelin ships a tire to Ford or General Motors, those companies would read the DOT number. If the same model tire were sent to Wal-Mart, the retailer would read the EPC.
This strikes me as a good compromise, one that could work for most—perhaps all—industries. (As companies replace their legacy IT systems, they could mainly switch to using EPCs to take advantage of a numbering system that works across many industries.) But getting more industries to adopt this compromise won't happen by osmosis, or even by having powerful CEOs, such as Metro's Körber, make speeches. Companies from all industries need to step up and take the lead. If they don't, the solutions and standards that emerge might not work for their industry, which means they won't be able to take advantage of a single global RFID numbering scheme.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.
